Three reasons why Tesla moved $760 million in Bitcoin

By Shaurya Malwa, CoinDesk; Compiled by Deng Tong, Golden Finance

• Tesla moved its bitcoin reserves for the first time in more than two years on Wednesday, shocking some bitcoin traders.

• But so far, apparently none of the bitcoins have been able to be used in trading wallets or traded for stablecoins.

• Here are some reasons why companies might move digital assets.

Elon Musk-controlled Tesla (TSLA) caused a stir earlier this week by moving more than $750 million worth of bitcoin (BTC) to new wallets after the company's bitcoins had remained untouched for nearly two years.

The action sparked discussion around Tesla/Musk's intentions and concerns about further selling pressure.

The electric car maker was the fourth-largest corporate holder of bitcoin at the time of the move about 40 hours ago, with about 10,000 tokens, according to BitcoinTreasuries data. Tesla increased its stake in 2021 and sold a large portion of it during the 2022 bear market.

Arkham Intelligence data available on Wednesday showed that bitcoin had moved to new wallets rather than to any exchange, allaying early concerns about a massive sell-off. Tesla or Musk have not yet commented publicly on the move, but more details are likely to come when third-quarter earnings results are released early next week.

Maartunn, a CryptoQuant community analyst, noted in an interview on Thursday that the reasons are currently limited to speculation, ranging from wallet management to reorganization:

• Compliance or internal audit:Tesla may transfer Bitcoin to meet accounting or legal obligations related to reporting or internal audits.

• Wallet management:Tesla may use multiple wallets for operational purposes. This seems unlikely because the newly created addresses use similar Pay-to-PubKey-Hash (P2PKH) addresses.

• Reorganization fund:This may be part of a strategy to reorganize Bitcoin holdings to cope with future sales or loans, similar to Mt. Gox. However, such speculation should be avoided until there is evidence of a sale (such as a transfer to Coinbase). This is not the case at the moment.

Another possible reason for the social media buzz could be the consolidation of UTXOs (Unspent Transaction Outputs), the process of combining multiple UTXOs into one or fewer UTXOs. UTXOs can be thought of as separate unspent amounts of any tokens waiting to be used in future transactions.

Each UTXO used in a transaction increases the transaction size, which can result in higher fees since miners are charged based on the data size of a transaction. Consolidation reduces the inputs for future transactions, potentially reducing costs and increasing the speed of larger transactions in the future.